Tag Archives: Compliance

Unlock the Benefits of Trade: How to Obtain a Certificate of Origin in Mongolia



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A Certificate of Origin is essential for businesses exporting products, as it certifies that the goods are partially or fully produced in Mongolia. Issued by the Mongolian National Chamber of Commerce and Industry (MNCCI), this document plays a key role in international trade by verifying the origin of goods for tariff benefits, trade agreements, and legal requirements.

What is a Certificate of Origin?

According to Article 6.2 of the Mongolian Law on Chamber of Commerce and Industry, the MNCCI issues certificates of origin under the “Regulation on determining the origin of export products derived from Mongolia and on issuing the certificate of origin.” This legal document is proof that goods exported from Mongolia are either entirely or partially manufactured within the country.

Types of Certificates of Origin:

The MNCCI issues several types of Certificates of Origin based on specific trade agreements, including:

  • Certificate of Origin Form A
  • Certificate of Origin Form E
  • Certificate of Origin Form APTA
  • Certificate of Origin Form B
  • Certificate of Origin Form-D

These forms are crucial in enabling products to qualify for tariff reductions or exemptions under various trade agreements, ensuring smooth international transactions.

Required Documents for Obtaining a Certificate of Origin

Entrepreneurs looking to obtain a Certificate of Origin must submit the following documents:

  1. Copy of foreign trade contract (buying/selling)
  2. Application form
  3. Invoice (English sample with Mongolian explanation)
  4. Packing list (Invoice & Packing list in Russian/English)
  5. Copy of Incorporation Certificate (individuals provide a copy of their identity card)
  6. Document detailing product composition (if raw materials were imported, include the customs declaration)
  7. Copy of product license
  8. Quality conformity and hygiene certificates
  9. Additional documents may be required for certain certificates, including an additional examination.

Easy Online Submission

For added convenience, businesses can now submit their requests for certificates of origin online by uploading the necessary documents to the MNCCI’s platform. This streamlines the process, making it easier for businesses to meet their export requirements efficiently.

By obtaining a Certificate of Origin, businesses not only comply with international trade laws but also unlock tariff benefits and access to global markets.

Why It Matters

Securing a Certificate of Origin from Mongolia ensures your products are recognized internationally, facilitating smoother transactions, securing tariff advantages, and opening doors to global opportunities.

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“Mongolia’s Bold Move into Crypto: What You Need to Know About the New Cryptocurrency Law”



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In December 2021, Mongolia enacted the Virtual Property Service Providers (VPSP) Law, bringing the nation into the digital finance era by legalizing and regulating cryptocurrency trading and exchanges. With a growing interest in crypto markets, Mongolia sought to establish a robust legal framework to protect against risks such as illicit activities while promoting transparency. Under the law, crypto service providers must register with the Financial Regulatory Commission (FRC) and adhere to strict Anti-Money Laundering (AML) and Know Your Customer (KYC) policies.

The VPSP law also emphasizes investor protection, ensuring crypto platforms disclose risks comprehensively. Income from crypto trading is taxable but exempt from value-added tax, reflecting Mongolia’s intent to capitalize on the evolving digital economy. Beyond finance, Mongolia is exploring blockchain technology in governance, public services, and supply chain management, showing a commitment to innovation and national growth.

For businesses venturing into Mongolia’s crypto market, compliance with these regulations is crucial. The law, aimed at balancing global trends with national interests, represents an important step in Mongolia’s economic diversification strategy.

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Mongolia to Take Action to Address Corruption



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During its regular session on March 14, 2024, the Cabinet of Mongolia made a significant step forward in the fight against corruption by supporting the submission of a draft Resolution to the State Great Khural of Mongolia for approval.

The draft Resolution outlines the implementation of an Action Plan for the Implementation of the National Anti-Corruption Program. the Resolution aims to establish an effective legal framework to combat corruption and encourage public trust in government. The newly proposed resolution for implementing the national anti-corruption program is a much-needed initiative to address the misuse of power and authority.

The draft Resolution outlines 290 measures to be implemented between 2023 and 2030, aimed at achieving the 11 goals and 48 objectives of the National Anti-Corruption Program, as set out in 2023 Resolution No. 59 of the State Great Khural. The success of this program hinges on the active participation and cooperation of all stakeholders, including the public and private sectors, civil society organizations, international organizations, the media, and citizens. The anticipated outcomes of this program are promising. A yearly decline in corruption levels is expected under the plan, leading to an expanded state budget, increased public trust in public organizations, rising citizen income, and a strengthened culture of zero tolerance for corruption. Furthermore, a more robust whistle-blowing system will be established, providing a crucial avenue for reporting and addressing corrupt activities.

Official corruption is a pervasive problem in many Asian countries, undermining the rule of law, hindering economic development, and eroding public trust in institutions. Corruption takes various forms, including bribery, embezzlement, nepotism, and cronyism. It affects all levels of government, from local administrations to national agencies, and can influence decision-making in areas such as business regulations, public procurement, and law enforcement.

The consequences of official corruption are far-reaching. It distorts markets, creating an uneven playing field for businesses and discouraging foreign investment. It also undermines the delivery of essential public services, such as education, healthcare, and infrastructure. Corruption can lead to inefficiencies, waste, and misallocation of resources, further exacerbating poverty and inequality. Moreover, it can fuel social unrest and political instability, as citizens become disillusioned with their governments and demand accountability.

The root causes of official corruption in Asian countries are complex and multifaceted. Some of the key factors include weak institutions, lack of transparency and accountability, and cultural norms that tolerate or even encourage corrupt behavior. In many cases, low salaries and inadequate resources for public officials create incentives for them to engage in corrupt activities. Additionally, complex regulatory systems and opaque decision-making processes can create opportunities for corruption to thrive.

Obligation to Report Beneficial Owner



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Does a new Mongolia company have to register their beneficial owner’s information with Mongolian authorities?

Mongolia revised the General Tax Law in 2019, and the article 18 of the law regulates the exchange of taxpayer information with other countries that have the international agreement, treaty or convention (Agreement) concluded with Mongolia. Among those exchanges is information of the legal entity’s beneficial owner.

Therefore, Mongolia has implemented a policy to create database of beneficial owner’s information of companies in order to provide opportunities to enhance cooperation between the State Registration Authorities and the Tax Organization as well as to exchange information for tax purpose with other countries that have the agreement with Mongolia.

In this connection, additional amendments to the Law on State registration of a legal entity were adopted which requires all registered legal entities in Mongolia to register information about their beneficial owners at the Legal Registry of the General Registry of Mongolia. Also, new establishing companies is entitled to register the company on the basis of the requirement to register their beneficial owner’s information.

Under the Law on Combating money laundering and the financing of terrorism and the Law on State registration of a legal entity, a beneficial owner is a person who has a significant or controlling ownership interest solely or jointly with others of holds a management function of the legal entity or is represented by other persons or ultimately owns the legal entity earning benefit and profit by exercising control of the legal entity, its transactions and arrangements to implement the transactions.

To summarize the above, newly founded company is obliged to register beneficial owner’s information with the state registration authority with an application to register a company.

Is Sports Betting Legal in Mongolia?



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Our Mongolian lawyers have recently received an inquiry from a prospective client on whether over sport betting activities is legal in Mongolia.

In Mongolia, the establishment and operation of a casino has been prohibited since 1999. Under the Criminal Act, operation of gambling activities is considered a crime while participating in the act of gambling is also a violation of the law.  The question then is whether the sports wagering is type of the gambling category.

 According to the legislations above, any business which involves gambling via dice, playing cards or other objects to make a profits, involving an unpredictable outcome and risk is a crime, including where such activities are conducted via information technology and social media. If someone participates in that activity, his/ her action is considered a breach of the Infringement Law.

According to this definition, sports betting is not considered gambling under the Mongolian legislation. Sports betting is an activity to predict the outcome by betting on real sports games like basketball soccer and tennis. It is possible for sport betters to estimate the probability of results based on their skills, knowledge and information. In other words, there is more control and predictability than the outcome of a game of chance, which differentiates sports betting from gambling.  

Companies in Mongolia are able to obtain a license to operate a lottery or betting games. This shows that Mongolia law sets an important distinction between pure gambling verses betting, reflected in the different regulations.

Anti-Corruption Law in Mongolia



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Each year, Transparency International association develops an index of corruption perceptions which reveals corruption levels at a worldwide standstill. From 2020-2022, Mongolia scored 35 points and ranked 111 out of 180 countries on the corruption index, while this year it was ranked 116th with 33 points.

Corruption is a high risk for foreign investors and companies operating business in Mongolia, arising from political corruption and judicial corruption. Since 1996, Mongolia has been fighting against corruption through activities such as a national anti-corruption program and anti-corruption legislations include the Criminal Code and the Anti-Corruption Law, which prohibit active and passive bribery. However, the fact that Mongolian corruption index has not decreased over the last 3 years, and the most recent update has even seen an increase in the corruption index which has led to questions about the effectiveness of anti-corruption law.

Law on Protection of Human Rights on Social Media



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On January 18, 2023, the draft of Law on Human rights protections on social networks was submitted by the Ministry of Digital Development and Communications, and the bill was adopted by the Mongolia parliament on January 20, 2023 providing no time for public to get acquainted with the bill.

The purpose of the law is to protect human rights and legitimate interests in the digital environment, to restrict inappropriate, insulting and discriminatory content, to protect from any kind of violence against children such as immorality, physical, mental and moral development and to prevent the use of drugs and psychotropic substances.

However, some human right organizations raised concerned that the law may not adequately protect rights to freedom of expression, speech and publication as protected under the Constitution of Mongolia. Moreover, they argue that the parliament’s adoption of the law overlooked standard procedures calling for public engagement and discussions.

Currently, the law has been passed by parliament, but has been vetoed by the President within the framework of his constitutional rights.

Amendments to the Personal Income Tax Law



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Our Mongolian lawyers and accountants regularly assist foreign individuals and companies in Mongolia with advise regarding Mongolian income tax issues. There are important changes to the Personal Income Tax law in 2023 that foreign companies and individuals should be aware of.

On 11 November 2022, the parliament adopted the Law on amendments to the Personal Income Tax which came into effect on 1 January 2023. The legalized change imposes progressive rates on individual’s salaries and other similar income tax. In other word, it is a tax system that increases rates when the taxable income goes up. Previously, the flat rate of 10% of Personal Income Tax on salary, wage, bonus, incentive and similar income was set for resident taxpayer. Now, tax in salaries and other similar income will be imposed as follows:

  1. 10% for taxable income between 0-120,000,000 MNT;
  2. 12,000,000 MNT and the income exceeding 120,000,000 will be subject to an additional tax of 15% for taxable income between 120,000,001-180,000,000 MNT;
  3. 21,000,000 MNT and the income exceeding 180,000,000 MNT will be subject to an additional tax of 20% for taxable income above 180,000,000 MNT

For instance, an individual who earns 144 million tugrug annually would be taxed at the rate of 10% in 120 million tugrug of taxable income. The remaining 24 million tugrug will be taxed at the rate of 15%.

Cryptocurrency Exchange and Trading in Mongolia



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As we work with many foreign clients engaged in range of international businesses, one of the comment questions asked by our clients lately is whether cryptocurrency is legal in Mongolia and how it is regulated.

In Mongolia, cryptocurrency trading and exchanges are legal, and the country implemented the Law of Mongolia on Virtual Property Service Providers (VPSP law) which came into force on December 17, 2021.

Along with the rapidly evolving technological processing in the world, the market of crypto is expanding in Mongolia. At the same time, there was a need to create a legal framework for the sector of crypto trading and exchanging in order to prevent from public risks as well as to have required records, suspicious or terrorist-related transactions reports.

Considering these issues, Mongolia has taken an adoptive approach to cryptocurrency regulation by applying legislation mentioned above. The main objective of the VPSP law is to register cryptocurrency exchanging and trading providers, monitor their activities, and determine their legal rights and obligations.

The VPSP law brought cryptocurrency under the regulatory authority of the Financial Regulatory Commission from December 2021, and imposed a requirement from cryptocurrency service provider companies to register and obtain a special license. Moreover, cryptocurrency exchange and trading service provider’s income is taxable and exempt from value added tax.

How to Extend a Minerals Exploration License



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Our team of Mongolian lawyers recently received an inquiry from a long-time client regarding the process for renewal of a minerals exploration license. Exploration licenses are issued by the Mineral Resources and Petroleum Authority for a 3 year period with holders permitted up to 3 extensions of the term of an exploration license for 3 years each. A license holder should apply for extension to the Mineral Resources and Petroleum Authority 1 month before the expiration of the exploration license.

Within 10 working days after receiving the application for the extension of an exploration license, relevant government agency shall verify whether the applicant qualifies for a renewal. If so, the period of the exploration license shall be extended for a period of 3 years, and this shall be recorded in the license registration book.

As soon as Mineral Resources and Petroleum Authority renews the exploration license it will notify the state inspection agency and details of the renewal will be published in the daily newspaper.

In the event, the license holder does not meet the above- mentioned requirements and conditions, the Mineral Resources and Petroleum Authority will refuse to extend the term/period of the exploration license and shall notify the applicant in writing of this and record it in the license registry book.